Michelle R. Payne. Compliance & Logistics Coordinator
Wetherill Associates, Inc.
411 Eagleview Boulevard, Suite 100
Exton, PA 19341-1167
RE: The tariff classification and North American Free Trade Agreement (NAFTA) eligibility of disassembled alternator and starter cores from Canada
Dear Ms. Payne:
In your letter dated April 22, 2013, you requested a ruling on the NAFTA eligibility for an undisclosed importer who will be importing disassembled alternators and starter cores from Canada, whose original countries of origin were China, Taiwan, India and Singapore.
Although you did not provide any particulars on the importer, you state that these alternators and starters are imported new into the United States and then shipped to a sister company in Canada, where they are sold as new Original Equipment Manufacturer (OEM). You claim your sister company in Canada eventually receives the used alternator and starter cores, removed by disassembly, from individuals in Canada; the cores are then exported to the United States.
The applicable classification subheading for the Starter Cores will be 8511.40.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “ … starting equipment of a kind used for spark-ignition or compression-ignition internal combustion engines ( … starter motors) … : Starter motors … .” The rate of duty will be 2.5 %.
The applicable classification subheading for the Alternator Cores will be 8511.50.0000, HTSUS, which provides for “ … generators ( … alternators) … used in conjunction with [spark-ignition or compression-ignition internal combustion engines]: Other generators.” The rate of duty will be 2.5 %.
In your Ruling Request, you also request a determination as to the NAFTA eligibility of the Alternator and Starter Cores.
Section 181.132(a) [NORTH AMERICAN FREE TRADE AGREEMENT: Subpart L-Rules of Origin: Disassembly] of Title 19 of the Code of Federal Regulations [Customs Duties] states “ … disassembly is considered to be production … .”
In addition, General Note 12(b), HTSUS, which sets forth the criteria for determining whether a good is originating under the NAFTA, states, in pertinent part, that:
“For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if -
(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States or
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that -
(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein or
Based on the undisputed fact that the Alternator and Starter Cores described above would have a Country of Origin determination based on disassembly in a NAFTA country, the subject Alternators and Starter Cores would qualify for NAFTA preferential treatment because they would meet the requirements of HTSUS General Note 12(b) as having a country of origin of Canada. The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
This ruling is being issued under the provisions of Parts 177 and 181 of the Customs Regulations (19 C.F.R. 177, 181).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions, please contact National Import Specialist Matthew Sullivan at 646-733-3013.
Thomas J. Russo
National Commodity Specialist Division